Guandian Defense Technology Co.,Ltd.'s (SHSE:688287) most bullish insider is CEO Ming Gao, and their holdings value went up by 19% last week

Key Insights

• Guandian Defense TechnologyLtd's significant insider ownership suggests inherent interests in company's expansion
• 51% of the business is held by the top 2 shareholders
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Guandian Defense Technology Co.,Ltd. (SHSE:688287) should be aware of the most powerful shareholder groups. With 51% stake, individual insiders possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit CN¥1.6b market cap following a 19% gain in the stock.

Let's delve deeper into each type of owner of Guandian Defense TechnologyLtd, beginning with the chart below.

See our latest analysis for Guandian Defense TechnologyLtd

What Does The Institutional Ownership Tell Us About Guandian Defense TechnologyLtd?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Guandian Defense TechnologyLtd does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Guandian Defense TechnologyLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Guandian Defense TechnologyLtd. With a 40% stake, CEO Ming Gao is the largest shareholder. With 10% and 0.9% of the shares outstanding respectively, Zhenbing Li and CCB Principal Asset Management Co., Ltd. are the second and third largest shareholders. Interestingly, the second-largest shareholder, Zhenbing Li is also Secretary, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Guandian Defense TechnologyLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own the majority of Guandian Defense Technology Co.,Ltd.. This means they can collectively make decisions for the company. Given it has a market cap of CN¥1.6b, that means they have CN¥813m worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 44% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Guandian Defense TechnologyLtd better, we need to consider many other factors. For example, we've discovered 3 warning signs for Guandian Defense TechnologyLtd that you should be aware of before investing here.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.